The Luxury & Fashion Biz: 09/24/10 (From Fashion Week to Fashion Week, Chanel gets aggressive, and Prices are set to rise)

1.) So we hopped from New York Fashion Week (NYFW) to London Fashion Week (LFW) and now we’re in the midst of Milan Fashion Week (MFW), which will then be followed by Paris Fashion Week (PFW). Yeah, I know, it all happens so fast it may as well be a blur.

NYFW played it so safe and familiarly retro that it didn’t seem to generate much excitement beyond the highly elaborate gowns on display at Marchesa and the colorful urban sophistication of Proenza Schouler.


Little Sister dressing up in Big Sister’s clothes

*NOTE 1: Mainstream brand Theory is rumored to be in talks to acquire the Proenza Schouler brand away from the Valentino Group, which presently owns a 45% stake in the brand.

In comparison to the majority of NYFW, London Fashion Week was like a vibrant shot out of a fashion cannon with the stereoscopic volume cranked to 11. Christopher Kane, who’s also the hired gun for the Versace diffusion label Versus, appeared to garner the most enthusiastic reception with an edgy leather-and-lace collection that wrapped any and all world-weary concerns in candy-coated hues and warm argyle sweaters:


Stop dragging my heart around

But Giles Deacon, the UK designer recently hired to revitalize the flagging Ungaro label, took the colorful conceit even further in his Giles show with a wacked-out, 80′s preppy-punk revival of which Style.com wrote, “The highest compliment you could pay the whole thing was that it was all in exquisitely bad taste”:


Girls just wanna have fun

And now the fashion journalist hordes have descended upon Milan, double-dog daring someone to wow them. Miuccia Prada, of course, obliged, though the wowing was more like a collective head-scratching than anything else as she trotted out a stable of South American beachside influences, from juicy-fruit solids to lounge-chair stripes to cartoon monkey prints. Yes, you read that correctly — monkey prints!


Carmen Miranda via I Love Lucy

The oohing and aahing, however, was saved for Karl Lagerfeld’s millionaire-peasant Fendi collection:


Ooooh and Aaaah

Which is all just an FYI so that you know what’s headed to your nearest department store come Spring, while also an opportunity to note that wow, this stuff is pretty much a 180 from the sober, classic themes (Mad Men!) all the big names showed in Fall, isn’t it? It’s like throwing even the kitchen sink at the wall in hopes that something will stick.

Next stop, Paris — where textile companies are already nervously sweating under the economic pressure: “Exhibitors at Texworld said customers were seeking out more blends in order to keep down their costs. ‘The cotton crop was very bad this year,’ said Ajay Joshi, marketing manager (exports) at Indian manufacturer BSL Suitings. ‘Instead of people buying 100 percent cotton, they’ve started buying 50 percent cotton, 50 percent polyester. So the pressure has spread to polyester. It’s a domino effect’ . . . Giovanni Turchet, president of Gentili, said, ‘They want to drink Champagne but pay the price of a Sprite.’”

2.) Lady Gaga Teams Up with Coty After All:
“The talented songstress has agreed to a deal with Coty to create a signature fragrance . . . While no clues have been given to what the much-anticipated fragrance will smell like, she’s dropped a hint as to what scent excites her. She told Marie Claire magazine that the $7 drugstore scent Sexiest Fantasies Champagne and Strawberries was a personal favorite.”

So we’ll have a celebrity knockoff of a $7 drugstore fragrance to contend with come Spring 2012 (when the fragrance is scheduled to launch). Great. Can’t wait. I’m sure the people at Coty are thrilled that they can produce something perversely and deliberately cheap, yet with a world-famous name willingly throwing her support behind it.

But what I find most interesting about the Coty announcement is that when rumors began circulating about the partnership back in July, Steve Mormoris, senior vice president of global marketing for Coty stated, “I know nothing of this project” and “It is a totally false rumor” — which, now that the partnership has been officially announced, means he was uttering near complete and bald-faced lies . . . and to Women’s Wear Daily, of all publications (WWD is probably the single most respected news outlet for the fashion and style related beat).

I can understand the need to keep mum about an ongoing contractual negotiation, especially when both sides are likely bound by non-disclosure agreements, but wouldn’t a “no comment” be a better response than “It is a totally false rumor” . . . especially when it’s actually *not* a totally false rumor?

3.) Chanel Gets Aggressive Against Casual Use of its Trademarked Name:
“The fashion powerhouse is going after any writer, editor, even blogger that uses its label’s name as an adjective to describe something . . . The company took a full-page ad in Women’s Wear Daily that read . . . ‘Although our style is justly famous, a jacket is not ‘a Chanel jacket’ unless it is ours, and somebody else’s cardigans are not ‘Chanel for now.’ And even if we are flattered by such tributes to our fame as ‘Chanel-issime, Chanel-ed, Chanels, and Chanel-ized’, PLEASE DON’T. Our lawyers positively detest them. We take our trademark seriously.’”

The article notes that, while it might sound like Chanel is being petty and overly protective, this is actually a necessary step that Chanel must take if they wish to protect their famous brand name from descending into generic descriptive territory. For example, the Xerox company lost a lot of rights (and accompanying value) to its name once “xerox” became a commonly-accepted term for photocopying papers and documents. A second, and more recent, example would be a high-ranking trademark board ruling against the Hormel company in 2007 when Seattle based tech-services company Spam Arrest successfully argued that the word “spam” has become a generic, commonly-accepted term for junk email, so is no longer distinctive only to Hormel and its SPAM food products.

*NOTE 2: Hormel had sued Spam Arrest in an attempt to overturn the Spam Arrest trademark, claiming that Hormel, and Hormel only, held the rights to the word “spam”, but the trademark board disagreed after a nearly five year long legal battle between Spam Arrest and Hormel, validating the tech-industry’s right to trademark the word “spam” in correlation with their email related products and services.

When a trademark loses its distinctiveness (in other words, is no longer solely associated with the company and its products/services), then the brand loses sole trademark claim, much like Hormel lost its ability to be the only company to hold a trademark with the word “spam” in it. In much the same way, Chanel might always keep its trademark primacy in beauty and fashion, but should the word “Chanel” become a generic descriptor (“That dive was totally Chanel!”, for example, as a way of saying that an Olympic competitor performed with sleek grace), then the company could be in danger of losing the grip on its brand name in other arenas not immediately associated with its own products and services.

So yeah, it might seem draconian that a blogger can’t write, “The TopShop jackets for Spring have Chanel shoulders and waistlines” without threat of a lawsuit, but there’s a method behind the madness.

*Aside to trademark lawyers: I’m describing this issue correctly, right?

In other Chanel news, Chanel announced that they’re closing their Vancouver, Canada boutique to expand their shop within a shop in the city’s Holt Renfrew department store — a move away from the conventional wisdom of the most profitable mode of operation for luxury brands at present.

4.) The Trade Wars are Heating Up:
“A U.S. congressional panel, in a move likely to increase trade tensions with China, approved on Friday a bill that allows the United States to slap duties on goods from countries with fundamentally undervalued currencies . . . Congress, in a fierce election season focused on sluggish U.S. economic growth, is moving closer than ever to passing legislation that would penalize China.”

So I’d expect to see all that fast-fashion from Asia get a whole lot more expensive in the next few years. Not to mention that the price of raw cotton is presently shooting into the stratosphere, reaching a fifteen year high: “After this summer’s severe floods in cotton-producing nations including China and Pakistan, textile mills have rushed to buy the fibre. In turn, this has pushed prices above the $1 a pound level for only the second time since the US civil war, according to analysts at the Financial Times . . . Retailers … have warned that the surge in cotton prices is likely to hit high-street (fast fashion) shoppers, as rising wholesale costs are passed on to the consumers . . . Items such as cheap T-shirts and jeans are especially likely to increase in price.”

Plus the continuing labor strife in third-world manufacturing countries: “Fashion brands and retailers sourcing from Cambodia have been asked to urge local authorities to put an immediate end to intimidation against workers and trade union leaders who took part in last week’s pay strikes if they want their ethical commitment to be taken seriously . . . there are reports of on-going violence against trade unionists and labour rights activists, legal threats against organizers, and the court-sponsored retaliation against union members.”

So I guess we’ve gone from blood diamonds to blood denim. Nice.

*NOTE 3: Let’s not even talk about the rubber shortage, shall we? Because we love our rubber-soled boots.

5.) INDUSTRY QUICK HITS:

A.) A disquieting theory is beginning to wind its way through financial analysis — that the reason high-end brands and department stores are showing sales increases in the U.S. is that even as unemployment rises and the economy continues to sputter, aspirational consumers aren’t cutting back on spending at all — in fact, they’re charging everything they can before their credit is cut off and they have to declare bankruptcy: “US consumers, already getting hit hard with permanent job losses that are never coming back, wage decreases, and depreciating real estate prices, understand that with their current debt load, most will never be able to pay back the money they owe. So, instead of defaulting on their debt with available credit remaining on their cards, they’ve decided to max out those cards before they stop paying.”

Get the Gucci while the getting is good, because even Wall Street’s enormous profit engines are slowing.

B.) Mariah Carey follows in the footsteps of Mary J. Blige: “Mariah Carey is the latest celebrity to sell her wares on a home shopping channel . . . Carey is working with HSN on a lifestyle collection that will span jewelry, footwear and a limited edition version of her Luscious Pink fragrance.”

Didn’t I tell you (I did! I did!) that once news of Blige’s perfume sales success on QVC hit the news, we’d have other not-quite-prime celebrities making a bee-line for the TV sales networks? And so it starts.

C.) While the Marc Jacobs Company is the latest big brand name to open an e-shop, and Barrons.com gleefully ranks the Top Ten luxury websites, Melinda O’Rourke (of The Mo-Down) writes that too many luxury brands are still resisting online sales: “There is one luxury no amount of money can buy, that no brand nor legacy will ever supersede. Time. Consumers are strapped for time, and luxury brands perhaps must recognise this if they want to maintain their loyal followings. This is not to say that the Internet will ever take over entirely, but online is an option young markets are increasingly refusing to go without.”

In related news, Zara, H&M and GAP get a failing grade for their e-shops from Christine Bardwell, senior analyst at technology analysis company Ovum: “‘In the last-minute competitive rush to launch an online store, the retailers have failed to take the customer experience into account and are jeopardising customer loyalty,’ said Bardwell.”

I can’t say that I’m too thrilled with the Marc Jacobs e-shop, either — it’s far more cutesy than it is user-friendly and efficient — but then, I’m not their target consumer.

*NOTE 4: Is it okay that I typed those last seven words with great relief?

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